YOUR COMPANY IS LOOKING FOR RECEIVABLE FINANCING
INVOICE FACTORING FOR CASH FLOW NEEDS
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Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
The factor finance solution in Canada. When it comes to this method of financing a Canadian business a few of the clients we meet these days admit they have done a HIROO ONODA in avoiding understanding receivable financing from factoring companies as a cash flow method.
IS IT TIME TO SURRENDER TO NEW BUSINESS FINANCE ALTERNATIVES
HIROO ONODA? He was a soldier in the Japanese army that had heard the war ended on his remote island station. The result? He spent 30 YEARS doing things the same old way, not knowing the world had changed around him. So bottom line, it just might be time to surrender to the new alternatives in Canadian business financing. Let's dig in.
When it comes to the best factoring companies the focus is only on improving your cash flow and ensure accounts receivable are managed properly.
FACTORING WORKS BECAUSE NUMEROUS TYPES OF FUNDING ARE DIFFICULT TO OBTAIN
How then has one single method of financing your firm changed the landscape so much? Some might make the case that banking in the SME sector is somewhat 'down for the count ' these days - it’s simply hard to achieve in the amount that you need.
MASTERING THE TERMINOLOGY OF A/R FINANCE
Part of the challenge around understanding what the factoring company in Canada does is being able to wade successfully through the different terms and offering of this finance mechanism. So it’s very easy to miss the big picture, or even worse, miss out on the right type of receivable financing that works best for your business.
WHAT IS THE BEST TYPE OF FACTORING FINANCE?
Our own most recommended solution is CONFIDENTIAL RECEIVABLE FINANCING which allows you to retain full control of the billing, collecting, and financing function of your sales, while the entire time still generating the cash flow you need for operations. So pretty well everyone uses that these days right. Wrong, we would guess that only a small majority of firms who utilize A/R finance in fact are even aware of confidential factoring.
Business owners can also choose non recourse factoring, allowing them to transfer collection and bad debt risk to a third party factor company, eliminating cash flow problems almost in entirety. No secret that many clients are even trying to pay in 90 days these days, not your 30 days typical terms, as experienced by many business owners. That creates a credit crunch you don't need. Recourse factoring is a more standard offering, with your firm managing credit risk and addressing those slow paying clients in the best manner possible to increase a/r turnover.
Why is the case then? We can probably chalk that up to a lot of factors - companies who don't take the time to investigate how A/R finance works, or industry players who don’t offer this method of financing and therefore have very little inclination to explain it to you. And by the way, pretty well all the banks in Canada don't offer a stand-alone ' factoring ' solution unless it's a subset of much larger transactions in the millions. That certainly eliminates most of the SME sector when it comes to receivable portfolio size.
We're often amazed at how clients seem to stumble on the factor finance solution in Canada. They are looking for alternatives, start talking to people, and suddenly realize, just like our friend HIROO ONODA that there's a whole new world of financing alternatives out there.
FACTORING IS A PART OF THE TOTAL ASSET BASED LENDING SOLUTIONS
Factoring companies in Canada can address facilities in all sizes for every firm; it tends to work best and makes sense when your receivables are in the 250k range and above. In many cases, as we have alluded to, factoring in Canada is a subset of a total asset-based lending facility that includes your inventory and equipment, but stand-alone factor financing - i.e. just for your receivable works quite well on a stand-alone basis.
CONCLUSION
So what then should the business owner and financial manager do when they seek alternative non-bank financing for accounts receivable? A good choice might well be to speak to a trusted, credible and experienced Canadian business financing advisor who can help you ensure the cash flow achieved via a factoring company in Canada works to the max for your firm and make factoring work.
It is the small business working capital lifeline you need to run and grow revenues while obtaining immediate cash from sales, typically within 24 hours. Factoring services for accounts receivables are truly a lifeline for your business needs as they relate to day to day short term funding.
That will allow you to bring on that full-time new employee, working 8 hours a day and generating the cash flow you need – aka the Factor finance solution.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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